Milos Raonic brutally ended Roger Federer's 14-match winning streak as the Swiss took a hit in his bid to overtake the top-ranked Novak Djokovic in the race for the year-end No. 1 spot.
Federer, who is looking to clinch the year-end top spot for a record-equaling sixth time, will now take some time off before chasing more points at the finals, then with Switzerland in the Davis Cup final against France next month.
Djokovic leads Federer by 670 points in the year-to-date rankings and could add another 640 points to his total with a win in Paris, but Federer has not given up his hopes of finishing at the top.
"I always thought it was going to get solved in London," Federer said. "Whether I am No. 1 at the end of this year, or one or two weeks later next year, it doesn't really matter. Novak seems to be fit, anyway. Now I will have a good preparation for London. It's not that I didn't want to win here, but I knew it was going to be tough from the start."
The seventh-seeded Raonic, who had never beaten the 17-Grand Slam champion in six previous meetings, hit 21 aces and lost only 15 points on his serve to complete a 7-6 (5), 7-5 win to reach the semifinals of the Paris Masters on Friday.
It was a must-win match for the big-serving Canadian, who kept alive his chances of qualifying for the ATP Finals after finding his best tennis at the right time, before Kei Nishikori sent him to the year-end tournament in London with a hard-fought win over David Ferrer in the final quarterfinal.
Nishikori's 3-6, 7-6 (5), 6-4 victory sealed the field for the Nov. 9-16 tournament at the O2, where he and Raonic will be playing for the first time.
"Considering all the circumstances around it, I think this was the biggest win for me," said the 23-year-old Raonic.
Djokovic, a two-time champion in Paris, defeated eighth-seeded Andy Murray 7-5, 6-2 to advance to the semifinals against Nishikori.
Murray, who booked his spot at the finals in the previous round, played 23 matches over the past six weeks and could not prevent the Serb from winning the final 5 games of the match as fatigue took its toll.
"I started rushing points at the end, that's for sure. I tried to finish points quite quickly," said Murray, who claimed his third title in five weeks last Sunday in Vienna.
Federer, who arrived in Paris on the back of consecutive titles in Shanghai and Basel, only had a few openings against Raonic. He created his sole break point in the 10th game of the second set but the Canadian saved it with an ace.
"It hurts to lose that way, but he deserves credit for serving the way he did and doing those passing shots the way he had to do it," said Federer.
Raonic managed to break Federer in the 11th game with two consecutive sumptuous shots. The Canadian first hit a stunning forehand return to create a break opportunity and converted it with a crosscourt backhand pass.
Earlier, Tomas Berdych qualified for the finals - where he will be playing for the fifth straight year - after rallying to beat Kevin Anderson.
The fifth-seeded Czech came out on top of a tight match and won 6-7 (4), 6-4, 6-4 to extend his unbeaten record against the South African to 12-0 and will now face Raonic.
Berdych, who hit 16 aces to Anderson's 12 but struggled with consistency on his first serve, made the decisive break in the ninth game of the third set with a backhand winner down the line.
"It's probably never going to be like a routine thing," Berdych said about his qualification. "I mean, it's always just proof of having a great season."
Ferrer, who won in Paris in 2012, came two points away from victory but failed to hold on to a 5-2 lead in the tiebreak of the second set. Nishiroki, who enjoyed a breakthrough season in which he claimed four titles and reached the U.S. Open final, is the first Asian-born player to qualify for the season finale.
The other players who will feature in London are Stan Wawrinka and U.S. Open winner Marin Cilic. Rafael Nadal withdrew from the event because of appendix surgery.